Which of the following is not a major impediment to shareholder control of large corporations?
A) The top management of the firm usually controls the voting and proxy process.
B) Shareholders seeking to change management recover their costs only if they are successful.
C) No one shareholder owns a substantial percentage of the corporation's stock.
D) Most shareholders in large firms engage in rational apathy.
E) Shareholders of large corporations are protected by limited liability.

Question

Quizplus · Accepted Answer

Limited liability protects shareholders from being personally liable for the debts of the corporation beyond their investment in the company's shares. This feature encourages investment but does not impede shareholder control of large corporations. The other options (A, B, C, D) describe factors that can make it difficult for shareholders to exert control over a corporation's management.

Which of the Following Is Not a Major Impediment to Shareholder